August 3, 2005

who's the addict?

Then and now ...

Explosive lottery growth gives state high risk, high gain

By Chris Honoré and Andrew Scot Bolsinger
Ashland Daily Tidings

Sheila Canal helps more than 700 families in Ashland and Talent with the information they need for a wide variety of assistance at the South Valley Community Services Center. The Ashland Street facility is Ashland’s only place to get gambling advice in person. Orville Hector | Ashland Daily Tidings

The state of Oregon stands in a peculiar position as the purveyor of gambling, acknowledging that while revenue brought in from gaming is less than one-tenth of the overall budget, it’s a badly needed percentage.

However, there is also little argument that gambling, for many of the state’s residents, can be problematic, addictive and even pathological, causing a fair share of harm and pain.

For many individuals, it is high risk. For the state, it is high gain.

“We’re addicted now to the lottery funds,” said Rep. Peter Buckley, D-Ashland. “It will be interesting to see whether we will be satisfied with this step we have taken with line games, or two or three years from now look for the next thing.”

This dual-headed addiction remains an uncomfortable topic for the state’s residents and its leaders.

“When pressed, (legislators) do understand that this is the wrong way for us to go,” Buckley said. “The majority of people, if you scratch the surface, they are very uncomfortable.”

Secretary of State Bill Bradley admits that what the lottery has become is not what many voters intended for it to be when it first passed in 1991. “It’s a different debate now,” he said. “If you put on the ballot what is happening now, it would have a different outcome.”

Still, Oregon’s reliance on lottery funds increases each year. The lottery is a proven form of increased revenue that can win approval from a contentious Legislature and an electorate that has voted down a sales tax multiple times in recent years.

As the lottery moves past its infancy, the state has reached the awkward teen years of its development, where an uncertain future lies ahead. What is certain is that the cost of this program, at least for the small minority who become addicted, is rising.

Buckley serves as a member of the House Trade and Economic Development Panel, which held the only hearing during the current legislative session about the problems associated with gambling.

“It was devastating,” Buckley said. “When you have family after family come and tell of the pain they have experienced ... the toll that it is taking is phenomenal.”

Oregon dependency on gaming represents a Faustian bargain with unintended consequences. Or, more cynically, consequences that the state is well aware of but can accept in return for the influx of revenues from gambling.

Treatment

During the fiscal year of 2002-2003, Oregon invested approximately $1.3 million in problem gambling prevention. Prevention programs are directed at avoiding or reducing the emotional, physical, social, legal, financial and spiritual consequences of gambling for gamblers and their families.

In addition, the state’s “Play Responsibly” campaigns, using television, radio and print media, aimed at reminding people that lottery games are for fun and entertainment, generate thousands of calls to the Problem Gambling Helpline.

Ironically, as gambling is expanding throughout the state, allotted treatment funding has declined. “The Department of Human Services has expenditure authority of $5.6 million for problem gambling services for the 2003-2005 biennium, which represents over a million-dollar drop from the previous two years.” said Jeffrey J. Marotta, problem gaming services manager within the Office of Mental Health and Addiction Services in Oregon.

Funding for problem and addictive gamblers routinely comes up short in the state budget. Buckley is concerned that a mere 1 percent of the lottery funds are dedicated to programs for problem gamblers. “We don’t fund programs at that level,” he said. “We keep making the choice not to fund that.”

In 1991, when video poker was approved as part of the state’s lottery, funding for problem gambling treatment services was established. Bill 118, approved in 1999, provided a minimum of 1 percent of the Oregon Lottery’s proceeds to be designated to a Gambling Treatment Fund and assigned the Department of Human Services with the responsibility of administering these funds.

The Problem Gambling Unit within the Office of Mental Health and Addiction Services manages Oregon Problem Gambling Services, which include a statewide system of 26 outpatient treatment centers, two statewide residential crisis-respite programs, a statewide minimal-intervention program, a statewide gambling help line, 18 community prevention programs, a statewide work-force development program and an extensive program evaluation project. From July 2001 to June 2003, $6.4 million of lottery proceeds funded these services. During the same period, 1,800 people were treated (1,504 gamblers and 296 family members).

The ARC provides mostly education, with participants remaining in the program on average for 90 days. They treat those who contact them as having a disease that causes the gambler to act “completely out of control and against their own will,” Oveson said. The chronic gambler is like someone who “takes one drink and is drunk.”

Though the Addiction Recovery Center has been around for 30 years, the gambling part of the ARC has only been in existence for two years, Kim Oveson, the center's human resources and quality assurance manager said. With the state continuing to bet on betting, it’s no long shot that Oveson and crew will only get busier in the years ahead.

The proceeds

One aspect of gambling that has garnered a significant amount of attention in Salem is the division of the profits.

The Oregon Restaurant Association lobby has become a powerful force in Salem, seeking to protect the earnings of video poker outlets. While the state revenue has increased tremendously, so has the income of bar and restaurant owners that house the games.

At the onset of video poker, vendors quickly realized how important this potential revenue stream could be. The ORA spent $37,182 on lobbying in 1992. By 1996, lobbying expenditures were $473,164, a more than tenfold increase.

Bradley said that the original proposal intended to provide a payment to video retailers simply to house the machines. Now many bars and restaurants find lottery money at the center of their economic growth.

“This was not how it was supposed to be,” Bradley said, eyes rolling in obvious frustration.

Bates agrees that the state is overpaying the vendors compared to other states.

“What a sweet deal,” Bates said. “For no investment other than floor space to make that kind of part of the profit, that’s a sweetheart of a deal.”

For many legislators, the risks of offering gambling in the state are only worth taking if the proceeds fund vital state programs, including support for those who become addicted to gambling.

“I don’t think you can justify it,” Bradley said, “if it’s merely supporting the Oregon Restaurant Association.”

Justifying the rise of gambling isn’t the problem of late. With the addition of video slot games, the state clearly is looking to raise the level of gambling. The push by Gov. Kulongoski’s office to upgrade video poker machines to include line games demonstrates clearly enough that the state believes the resulting revenues outweigh the possible harm done.

“There’s a lot of economic discussions based on gambling. But there are really no discussions about whether we want to change this.” Buckley said.

Bates sees no need to change the use of lottery funds, which he again refers to as a small part of the overall budget. The rhetoric of concern, he says, is often mostly talk.

“Some are completely opposed to gambling and think its an insidious way to raise money,” Bates says of his colleagues in the Legislature.

“On the other, are people like me, who see this as something that’s a personal choice, they don’t always think its the best thing to do, but they have friends who have some fun with this and it’s no big deal.”

Either way, lottery votes often pass with overwhelming majority, Bates recalls.

“The money is going out pretty carefully and prudently,” he says.

A dual mission

The state’s need for the lottery revenue outweighs its concern over the impact. Buckley likens it to the sale of alcohol, where the state has a “dual mission to promote alcohol sales and make money, but also fund the rehab,” he said.

But the state doesn’t aggressively market alcohol sales as it does with the lottery.

“Good point. Good point,” Buckley said, pausing to consider the idea. “We depend on the retailers and suppliers (with alcohol), but we’re the suppliers of this.”

And the beat goes on.